Mapletree Tenders Highest Bid of $392m For Anson Road Site

Sources : The Straits Times, Tue, Jul 24, 2007

MAPLETREE is set to clinch a 99-year leasehold for an office plot along Anson Road with a knock-out bid of $391.93 million.

Mapletree's offer for the prime 39,733 sq ft site was nearly $74 million above the second-highest bid: $318.2 million from NTUC Income Insurance Cooperative.

There were five proposals, reflecting a keen interest in office development sites in view of a tight supply in the market, especially around the central business area.

CapitaLand's Enggor Street Trust Company bid $313 million, Peak Properties' Peak Century offered $298 million, while Keppel Land's Ocean & Capital Properties trailed the field with $270.2 million.

'Property firms that do not usually buy commercial development sites are doing so because of the lack of office buildings for sale,' said property consultancy Knight Frank's head of research and consultancy, Mr Nicholas Mak.

The Anson Road site is next to two vacant residential areas set to be launched for sale in September and Far East Organization's Icon condominium. It is also across the road from another commercial site recently put up for sale.

Mapletree's bid, made through wholly owned subsidiary St James Power Station, translates to $1,021 per sq ft (psf) of potential gross floor area.

Mapletree said a building can be completed on the site before 2010, the year when the office supply crunch should begin to ease, according to consultants.

The site has room for a 50-storey building with a gross floor area of about 383,808 sq ft. Mapletree said, however, that the 'optimal' building for the site is an 18-storey block with floor plates of 22,000 sq ft of leasable area.

Chief operating officer Tan Boon Leong said: 'Indication of interest from corporate users has been positive, and we expect the building to be substantially pre-leased before completion.'

Consultancy CBRE said Mapletree's bid would result in a likely development cost of $2,000 psf to $2,100 psf, with monthly rents of about $9 psf to $10 psf.

At the end of last month, the office occupancy rate in the Tanjong Pagar area was about 95.5 per cent, up from 92.7 per cent in the first quarter of the year and from 91.8 per cent in the fourth quarter of last year.

'Given the shortage of office space in the face of expanding business activities, it is an opportune time to develop a good quality building with a sizable floor plate of more than 20,000 sq ft,' said CBRE Research's executive director, Mr Li Hiaw Ho.

'This would provide some 310,000 to 320,000 sq ft of lettable office space, providing some relief to the supply crunch in the central business district.'